Kickstarting a new business is exciting, and you may be tempted to get it running immediately. However, it is important to set your business up correctly to maximise growth and avoid legal consequences. To assist, we have made a free start-up checklist for businesses which you can download below.
This article sets out 5 must-take steps for your start-up business.
1. Do your research
Before making any big decisions, make sure to do some research on your business idea. Basic considerations include who your target audience will be and who your market competitors are.
From a legal standpoint, it is important to research the availability of your identifying business aspects, including your business name, website domain and intellectual property such as trade marks and designs.
2. Register your business aspects
Once you have researched the availability of your identifying business aspects, it is time to register them officially. This should include registering your start-up business name, Australian Business Number (ABN),domain name and any trade marks.
While the process can be time-consuming, undertaking these steps properly helps you to legitimise and legally protect your business.
3. Pick a business structure
Start-ups must choose a business structure, as this will impact key legal areas such as tax liability, asset protection and set-up costs. Business structures you may wish to choose from include a sole trader, company, partnership or trust. Each structure has different features and processes, and it may be helpful to talk to a legal professional about which is best for your start-up business.
4. Set up your tax and finance processes
Financial obligations are one of the most important parts of running a business. For start-up businesses, remember to:
- Set up a record keeping system to track your income and expenses
- Know your obligations as an employer, including deducting tax and paying superannuation
- Set up a separate bank account for your business, keeping personal and business transactions separate
- Register for GST if you are expecting to have over $75,000 in turnover
- Know your reporting obligations to the Australian Tax Office (ATO), including providing business activity statements and lodging income tax returns.
5. Get your legal documents
Lastly, start-up businesses should have all the necessary legal documents. Often overlooked, these binding documents help to limit liability and protect your business from costly legal disputes in the future.
Key legal documents include:
- Website Terms and Conditions
- Shareholders’ Agreements
- Company Constitution
- Supply and Distribution Agreements
- Employer and Contractor Agreements
- Share Subscription Agreements
- Intellectual Property Assignment Agreement
Setting up your business correctly can help you to maximise growth and avoid legal consequences. Key steps for start-up businesses include:
- Undertaking proper research before beginning
- Registering your business name, ABN, website domain, trade marks and other intellectual property
- Choosing a business structure that suits your needs
- Setting up proper financial processes and knowing your tax, reporting and employment obligations
Gladwin Legal are experts in advising businesses, from start-ups to established companies. If you require assistance with your business, please contact us at or 1300 033 934.